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Fraud can be defined as: Any illegal acts characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the application of threat or of physical force. Frauds are perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal or business advantage. Fraud represents an intentional misstatement of the financial statement which can be material or immaterial. Fraud takes place when you find evidence of intent to mislead. Fraud occurs when someone purposefully produces deceptive data. Fraud can take the form of the falsification or alteration of accounting records or the financial statements.

Errors are just the mistake or misstatement or unintentional deviation from the truth. An act or condition of ignorant or imprudent deviation from a code of behavior. Errors aren’t deliberate. An error represents an unintentional misstatement of the financial statement. It may be material or immaterial.